Fundamentals Of Insurance (BC) | 117 Questions and Answers(A+ Solution guide)

Insurance plays an important role in managing financial risk. The main purpose of Insurance is to: A. Enable the consumer to obtain loan or mortgage. B. Provide employment and investment capital. C. Allow spread of risk. D. Reduce losses through loss prevention and loss reduction. - C. Allow spread of risk. When the insurer terminates an insurance policy, ALL of the following conditions apply, EXCEPT one. Pick the exception: A. The insured is entitled to 15 days' written notice of termination sent by registered mail of 5 days' written notice personally delivered. B. The refund due to the insured shall be calculated on a short rate basis. C. Unless otherwise stated, the refund shall accompany the notice of termination. D. The refund shall be in the form of money, postal or express company money order or cheque payable at par. - B. The refund due to the insured shall be calculated on a short rate basis. The major function of insurance is to: A. Reduce the cost of losses. B. Share the losses of the few among many. C. Safeguard the interest of the mortgagees D. Serve as the basis of the existing credit system. - B. Share the losses of the few among many. Under the policy of "fire" insurance, the insurer would be obligated to pay the following loss only: A. Fire damage caused to appliance following a sudden power surge.B. Fire damage to insured buildings occurring during a rebellion. C. Damage to insured property due to radioactive contamination. D. Loss of property caused by a process involving the application of heat. - B. Fire damage to insured buildings occurring during a rebellion